RusAl officials Monday said the company planned to double its cathode block capacity in China and predicted that the country would become a net importer of aluminum by 2009.
The company, the world's biggest producer of primary aluminum, plans to raise its cathode block capacity in the country to up to 30,000 tons this year, largely through a planned acquisition, said Grigory Goryachikh, general manager of Shanxi RusAl.
"We have three or four target companies. ... We expect a deal would be signed by the end of this month," Goryachikh told reporters on the sidelines of an industry conference in Shanghai.
All the acquisition targets are based in the northern Chinese province of Shanxi, and the acquisition is expected to go through by year's end, he said.
RusAl had been in talks to buy Shanxi Qixian Yutong Carbon, a leading Chinese firm that produces 20,000 tons of cathode blocks per year, but negotiations broke down, Goryachikh said. Shanxi RusAl has an annual capacity of 15,000 tons of cathode, which account for about 30 percent of supply to the Russian company's aluminum smelting units.
RusAl would not expand capacity at an existing plant, in Linshi, Shanxi, due to difficulties with approval and equipment sourcing, he said.
China, the world's largest producer and consumer of aluminum, may become a net importer of the metal from 2009, RusAl sales director Peter Finnimore told the conference.
The country will probably account for 36 percent of global consumption of the metal used in beverage cans and aircraft by 2010, up from 25 percent currently, he said.
China is the key driver of global aluminum demand, which will grow by 3.6 percent annually, according to RusAl.
World aluminum demand is forecast to increase by 11 million tons by 2010 with China, Russia and India accounting for 75 percent of the increase, and more than double with a gain of 45 million tons by 2030, Finnimore said in his presentation.
RusAl and Indonesian mining firm PT Antam are nearing a preliminary joint-venture agreement to produce aluminum in Indonesia's West Kalimantan province, a representative of the Indonesian firm said Monday.
Executives from the two companies expect to sign a memorandum of understanding Sept. 6, said Bimo Budi Satriyo, Antam's corporate secretary, AFX reported Monday.
A spokeswoman for RusAl, Olga Sanarova, would not confirm the deal with Antam but said the company was interested in Indonesia's rich bauxite resources.
Kommersant reported earlier this month that RusAl was investigating opportunities in Indonesia to build a bauxite mine and aluminum smelter.
Indonesia is very attractive for metals companies, thanks to its large resources of bauxite, an essential raw material for aluminum, and its close proximity to China.
"Indonesia is very well-located, and is close to alumina resources," said Yury Vlasov, a metals analyst with Renaissance Capital. "Provided [RusAl] can get good rates for electricity, it will be able to provide alumina at very competitive prices."
RusAl has previously said that it is seeking investment opportunities in Vietnam, where it opened an office in May. Vietnam boasts the fourth-largest bauxite reserves in the world.
United Company RusAl, which is controlled by Oleg Deripaska, was created in March, following the merger of Russian Aluminum, SUAL and the alumina assets of Swiss-based Glencore. It has operations in 19 countries.